SBIR at the National Science Foundation (2015) / Chapter Skim
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4 Commercial and Knowledge Outcomes
4 Commercial and Knowledge Outcomes
Pages 86-123
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From page 86... ...
Therefore, this chapter also analyzes knowledge effects, which relate to both the first and second mandated goals, stimulating technological innovation, and helping to meet the NSF mission goals related to expanding scientific and technical knowledge. Outcomes related to the third goal, "to foster and encourage participation by socially and economically disadvantaged small businesses"1 (defined to include woman-owned small businesses)
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From page 87... ...
Kesh Narayanan, a former NSF SBIR program manager, often said that 97.5 percent of NSF funding went to basic science, and that he was in charge of the 2.5 percent of all NSF funding that was aimed at achieving commercial results. Congressional interest in this area is also high.4 Commercialization is important to the nation's economic prosperity.
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From page 88... ...
. A further 19 percent reported that they expected to generate future sales from the surveyed project -- a percentage that in part reflects the relatively recent date of some awards in the sample.
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From page 89... ...
The survey asked respondents who reported some sales from the surveyed project to also report the amount of sales by tier (see Table 4-2)
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From page 90... ...
None reported sales of $50 million or greater in project related revenues. Markets by Sector As shown by Table 4-3, more than one-half of Phase II respondents reported sales to the domestic private sector in the United States.
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From page 91... ...
As Table 4-5 shows, the median size grew for Phase II companies from 6 at the time of the award to 10 at the time of the survey. The percentage of Phase II respondents reporting 50 or more employees about doubled -- from 9 percent at the time of award to nearly 17 percent at the time of the survey, which indicates that some NSF SBIR recipients have become relatively large enterprises (within the general universe of small companies)
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From page 92... ...
Most reporting funding were in the category of $100 to $500 thousand. Two percent of Phase II respondents reported additional non-SBIR investments of at least $20 million.
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From page 93... ...
Fifteen percent of Phase II respondents indicated that their company had spun off one or more new companies, and 7 percent reported that they had been acquired by or merged with another firm. However, the answers of the majority of respondents indicated that their companies had, as of the time of the survey, not been acquired, had not implemented or planned an initial public offering (IPO)
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From page 94... ...
Established one or more spin-off companies 15.0 Been acquired by/merged with another firm 7.0 Made an initial public offering 0.0 Planning to make an initial public offering in 2011-2012 0.0 Any of the above 22.0 N = (company weighted) 83 N = (not company weighted)
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From page 95... ...
Thirty-nine percent of Phase II respondents reported licensing agreements, and 60 percent reported e ither marketing/distribution agreements or customer alliances. These four -- R&D agreements, licensing agreements, marketing/distribution agreements, and customer alliances -- were the most prevalent types of agreements reported by Phase II recipients with U.S.
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From page 96... ...
The results are shown in Table 4-13. Forty-seven percent of Phase II respondents reported having one or more full-time marketing staffer.
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From page 97... ...
Phase II survey respondents reported that almost 70 percent of Phase II p rojects had already recorded sales of products or services derived from the surveyed award. A further 18 percent expected future sales.
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From page 98... ...
More than 70 percent of Phase II respondents reported at least 1 patent related to an SBIRfunded technology, and 12 percent of Phase II respondents reported at least 10 such patents. The mean number of patents reported by Phase II respondents is 5.
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From page 99... ...
0 1 or 2 31.2 3 or 4 17.4 5 to 9 10.9 10 or more 11.9 Total 100.0 Mean 4.8 N = (company weighted) 82 N = (not company weighted)
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From page 100... ...
It shows that more than 80 percent of Phase II respondents indicated that an individual at the surveyed company submitted at least one scientific paper related to the surveyed award. Thirty-two percent reported more than three scientific papers submitted.
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From page 101... ...
At the top of the tabular listing for having been specifically mentioned as playing a role in at least five surveyed NSF SBIR projects are the Universities of Colorado, Florida, Texas, Georgia, and California-San Diego, plus MIT and Columbia. When all mentions are taken into account (including those universities and branches that received fewer than 3 and therefore are not included in Table 4-18)
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From page 102... ...
Conclusions: Knowledge Effects The survey data reveal that SBIR-funded projects generate a substantial amount of technical knowledge that enters the public domain, thus meeting the congressional objectives for the program to stimulate technological innovation,
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From page 103... ...
Finally, many SBIR companies are closely connected to universities. Fiftyeight percent of NSF Phase II respondents reported a university connection on the surveyed project, and seven universities were specifically mentioned as playing a role in at least five surveyed NSF SBIR projects.
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From page 104... ...
It seems likely that SBIR funding would lead to an expansion of the project scope. However, the selection of SBIR awards is based on criteria that 12 National Research Council, An Assessment of the SBIR Program of at the National Science Foundation, Appendix B
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From page 105... ...
Project Delays Absent SBIR Funding As with project scope, the immediate supposition is that, absent SBIR funding, projects would have been delayed while other funding was identified and acquired. However, as discussed in Chapter 2, SBIR awards carry delays of their own, which can be substantial in some cases.
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From page 106... ...
Long-Term Impacts on the Recipient Company Although SBIR awards have direct effects on specific projects, they can also have a longer term effect on the trajectory of company development, creating capacity and in some cases providing a needed input that transforms long-term outcomes. The survey asked respondents about the SBIR program's impact on the company's long-term development.
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From page 107... ...
179 SOURCE: 2011 Survey, Question 45. reported that SBIR awards had transformed their companies.
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From page 108... ...
The evidence from survey respondents suggests that this powerful positive jolt is not an uncommon effect of SBIR awards. Key aspects of SBIR-driven transformation are explored in more detail in Chapter 6, which draws extensively on the numerous open-ended comments received in response to a question about the long-term impact of SBIR awards on recipient companies, as well as on the case studies.
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From page 109... ...
founded by given company founders makes it possible to estimate the use of SBIR awards by serial company founders. As may be determined by Table 4-25, more than half of recipient companies had at least one founder who had previously founded another company, while 46 percent had not.
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From page 110... ...
Only 9 percent of Phase II respondents reported most recent prior employment in government and 5 percent in other areas. Previous Academies studies concluded that, for at least some companies, SBIR funding provided opportunities that led directly to company formation.
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From page 111... ...
TABLE 4-27 Number of Founders with Academic Backgrounds Number Phase II (Percent) 0 19.1 1 38.5 2 21.8 3 11.9 4 5.8 5 or more 2.9 Total 100.0 At least 1 80.9 N = (company weighted)
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From page 112... ...
20 percent of Phase II respondents indicated that the company had been founded "because of SBIR." These data on founders and company foundation indicate that SBIR company founders tended to have strong connections to both business and academia. Companies with founders having a business background were prevalent among recipients of Phase II funding, as were those companies having founders with an academic background, and those companies having more than one founder.
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From page 113... ...
Phase II respondents reported products or processes in use at a rate of 47 percent. Fifteen percent of respondents reported that the project is continuing post-award technology development, while 22 percent reported that the project had been discontinued by the company recipient of the award.14 As shown in Table 4-32, the survey sought reasons for why projects had been discontinued.
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From page 114... ...
114 SBIR AT THE NATIONAL SCIENCE FOUNDATION TABLE 4-30 Respondent Identification of Phase II Awards by Industry Sector Industry Sector Phase II (Percent) Aerospace 11.2 Defense-specific products and services 10.2 Energy and the environment 20.9 -- Sustainable energy production (solar, wind, geothermal, bioenergy, wave)
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From page 115... ...
funded research 2.2 Efforts at this company have been discontinued 22.0 Discontinued because no sales or additional funding resulted from this project 12.6 Discontinued but the project did result in sales, licensing of technology, or 9.3 additional funding Project is continuing post-award technology development 14.8 Commercialization is under way 13.7 Products/processes/services are in use 47.3 In use by target customers 36.3 In use by customers not anticipated at the time of the award 11.0 Total 100.0 N= 182 SOURCE: 2011 Survey, Question 30. TABLE 4-32 Reasons for Project Discontinuation Reason Phase II (Percent)
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From page 116... ...
As shown in Table 4-33, a lack of market demand at 25 percent was the single largest reason given for Phase II project discontinuation, followed by not enough funding at 18 percent. Based on the data provided in these tables, it seems reasonable to conclude that SBIR funding makes a substantive difference to the plans of companies, and that the absence of alternative funding is often a reason for project discontinuation.
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From page 117... ...
More than a third of Phase II companies reported revenue of at least $1 million but less than $5 million, and 15 percent reported revenue of $5 million or more. The median company size as indicated by amount of revenue was $1.1 million for Phase II respondents.
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From page 118... ...
As shown in Table 4-36, while 34 percent of Phase II respondents reported that their companies received none of their revenue from SBIR sources during the most recent fiscal year, the majority reported that part of their revenue came from SBIR awards. The part of company revenue composed of SBIR funds varied substantially.
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From page 119... ...
Overall more than 80 percent of companies received at least one prior Phase I award related to the surveyed award. Phase II respondents were more likely to report at least two or more, as well as five or more prior related Phase I awards.
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From page 120... ...
0 15.7 13.6 1 45.5 38.5 2 24.6 24.3 3 9.4 10.7 4 2.1 4.7 5 or more 2.6 8.3 Total 100.0 100.0 1 or more 84.3 86.4 N= 191 169 SOURCE: 2011 Survey, Question 40.1.1. TABLE 4-38 SBIR or STTR Phase II Awards Related to the Surveyed Project Technology Number Phase II (Percent)
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From page 121... ...
Table 4-39 probes the sources of funding for the given technology area prior to company receipt of the Phase II SBIR award. About two-thirds of all Phase II respondents reported at least one source of additional funding for the technology areas prior to the Phase II SBIR award.
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From page 122... ...
4) SBIR funding makes a significant difference in the founding of small inno ative companies and the decision to proceed with a specific project: v 45 percent of respondents reported that the SBIR program played a role in company foundation, and almost 70 percent of Phase II respondents believed that the surveyed project probably or certainly would not have proceeded without Phase II funding.
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From page 123... ...
More than one-third of Phase II respondents reported that SBIR had a "transformative effect," and 88 percent reported a substantial posi tive effect or a transformative effect.
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